The late interest has been calculated using anannual interest rate of 11% since Cuba defaulted on the debt, far above the interest rate the UK government itself pays. The UK government has not received any payments on the debt since 1987, and there was no expectation that any of the made-up late interest would ever be paid.

The deal will cost Cuba money as it had been in default on the debt since 1987. The debt comes from loans backed by UK Export Finance, the part of the government which facilitates loans to fund the purchase of UK exports. Following a campaign by the Jubilee Debt Campaign, the UK government revealed in 2012 that of the original loans to Cuba, almost half were for “boats and vessels” though did not specify whether these were for civilian or military use.

The UK government has refused to conduct a full audit of debt owed to UK Export Finance to discover how beneficial or not the original loans were. Calculations by the Jubilee Debt Campaign have identified that at least 20% of loans where debts are outstanding were for military equipment, including to dictators such as Saddam Hussain in Iraq, General Suharto in Indonesia and General Mubarak in Egypt.

Tim Jones continued:

“UK Export Finance has a history of lending for dodgy, damaging and corrupt deals. It should conduct a full audit of its debt, to identify past bad loans and how to stop making them in the future.”

“British people think UK aid money should be used to reduce poverty and inequality around the world. But too often it is driven by the interests of British companies at the expense of increased poverty and inequality.”

Between 2002 and 2013, $663 million of UK aid money went to the Private Infrastructure Development Group, which is tied to spending the money on Public Private Partnerships similar to the UK’s highly expensive Private Finance Initiative. Other aid money is being used to promote private schools in Africa and South Asia.

A review in 2012 found that of 117 aid contracts given in the previous 18 months 108 (92%) were for British companies and only one was awarded to a company from a developing country.